Winnipeg hemp foods company on a high
Venture capital firm helps with expansion
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Hey there, time traveller!
This article was published 10/09/2010 (4362 days ago), so information in it may no longer be current.
When daytime talk show stars like Martha Stewart and Dr. Oz start endorsing the health and nutritional benefits of hemp-seed foods, chances are it’s only a matter of time before middle America will start queuing up to buy the product.
And that’s exactly what’s been happening with products like hemp-seed oil, hemp milk, hemp-seed butter, shelled hemp seed and hemp protein and fibre powder.
What that means for Manitoba Harvest Hemp Foods & Oils, the largest vertically integrated hemp food manufacturer in the world, is it needs more capital to keep pace with that growth.
This week, the Winnipeg company announced Avrio Ventures, a Calgary-based venture capital firm that specializes in industrial bio-products, nutraceutical ingredients and food technology companies, just made another multimillion-dollar investment in its operation. "It is huge news for us," said Mike Fata, Manitoba Harvest’s CEO and co-founder.
It’s Manitoba Harvest’s second placement from Avrio, a $75-million fund that is partially backed by Farm Credit Canada.
Over the last 12 years, the Winnipeg company has quietly become one of the fastest-growing companies in the country, with average annual growth of between 50 and 75 per cent.
"We grew about 50 per cent over the past year and probably could have done better but for the global recession," Fata said.
During the last five years, Manitoba Harvest’s sales have grown more than 500 per cent. In addition, the company has been on Canada’s Profit 100 list of the fastest-growing businesses for four of the last five years.
The additional capital is going to go to marketing and new product development.
As it stands, more than 50 per cent of its Canadian sales are from the large grocery store chains. But more than half of its total sales are now in the United States.
"Hemp foods and supplements are among the fastest-growing categories in the natural products industry," said Jim Taylor, managing partner of Avrio Ventures. "With additional funds, Manitoba Harvest is well-positioned to solidify its position as the global hemp foods leader and take advantage of new market opportunities."
The company moved into a new production facility 18 months ago that has the capacity to quadruple current production.
And at the rate of growth hemp-seed food and nutritional products are experiencing, that may not take too long.
Next month, Avrio and a New York investment banking firm that specializes in sustainable agriculture ventures are hosting a sustainable agriculture investment conference in Toronto. Kim Shuka, executive director of the Canadian Hemp Trade Alliance, said there are more and more hemp products on grocery shelves.
"Before, it was just the early adapters, but now more mainstream consumers are picking up on the health benefits like the Omega 3 features of hemp products," she said. "We are working at getting hemp seed recognized as just as important as flax and canola."
While there is some work that remains in that regard, Manitoba is clearly the heart of the industry in Canada and with Manitoba Harvest and Hemp Oil Canada Inc. in Ste. Agathe, this province boasts the two largest companies in the country.
Hemp acreage is up to 25,000 acres nationally, with much of it in Manitoba. But Fata said that of the 10,000 acres Manitoba Harvest contracted this year — up from 100 acres 12 years ago — production is diversified throughout the three Prairie provinces.
Shuka said while serious efforts are being undertaken to grow the market, care is also being applied to avoid unwieldy growth.
"We want reasonable, incremental growth so that supply and production are in sync with what the processors want," she said.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.